Chargeback Prevention Alert Pricing: How to Get the Best Deal

Prevention alert pricing is set by the vendor that provides the solution (Ethoca or Verifi). Pricing is per alert and is usually in the $20-40 range. While that may seem expensive, alert fees usually cost less than chargeback fees — and alerts come with several benefits.

There are a couple factors that might impact pricing:

• The solution you choose (Ethoca or Verifi). Traditionally, Verifi has been priced slightly higher than Ethoca. However, recent adjustments at Verifi are leveling prices.
• The solution provider you work with. Some solution providers will violate contract terms with Ethoca and Verifi to undercut their competitors with lower prices. However, the old expression, “you get what you pay for,” is true. You might pay less for each individual alert, but you’ll receive way more alerts than you should because the solution provider has to recoup their losses.
• The number of alerts you receive. High alert volume might warrant a discount.

Because alert pricing is set by the vendor providing the alerts, there isn’t a lot of flexibility. But there are a few things to be aware of as you consider pricing.

• Look for ways to improve the customer experience. If you reduce or eliminate the need for a dispute, you eliminate the corresponding alert. We offer dozens of suggestions on how to improve your business policies and practices to reduce the risk of chargebacks. Check it out!
• Use data to determine if there are countries, products, or marketing strategies that lead to more risk than reward. For example, if the dispute rate is outrageously high in a particular country, maybe you shouldn’t sell there. If you cut your dispute rate, you’ll cut your alert expenses.
• Make sure you are requesting — and receiving — credits. If you refund a disputed transaction via an alert but still receive a chargeback, you’re entitled to a credit. Recovering unwarranted fees will help boost your bottom line.
• Periodically check in with your service provider on price. Maybe there are ways to lower your fees. For example, if your volume has increased significantly, you might be able to pay less for each alert. Or if vendors lower their prices, those reductions could be passed along to you.
• Work with an experienced provider like AltoPay^® that can help you optimise your alerts so you aren’t receiving — and paying for — unnecessary alerts.

What is the value of prevention alerts? Here’s what you are paying for.

Lower chargeback rates

What’s the biggest draw of chargeback prevention alerts? Preventing chargebacks!

If you can resolve a dispute before it advances to a chargeback, you can lower your chargeback ratio. And if you lower your chargeback ratio, you can avoid chargeback monitoring programs (or get out of them if you’re already enrolled).

And that’s a very important benefit.

If you are enrolled in a chargeback monitoring program, you’ll face significant penalties including additional fees, administrative hassles, and possibly even account closure. If you lose your merchant account, you’ll have a hard time growing or even maintaining your business.

On the surface, alert fees may seem expensive. But in reality, they are usually on par with your chargeback fee — oftentimes even less. Why pay for a chargeback fee when you can pay the alert fee and avoid the chargeback altogether?

The gift of time

Another important benefit of prevention alerts is the timing.

When a chargeback is filed, it will take between two and five weeks for the notice to reach you. And a lot can happen in that time!

Let’s look at an example.

A fraudster detects a weakness in your defenses — you don’t have velocity checks turned on so the fraudster is able to make hundreds of unauthorized purchases in a matter of minutes. Because you don’t know a fraudster is at work, you ship out your valuable products. And the next day, a different fraudster does the same thing. This continues for weeks until chargeback notices start rolling in. In that time, you’ve lost thousands of dollars in stolen merchandise and your chargeback ratio has gone through the roof.

Now, let’s look at the same situation but with prevention alerts.

A fraudster makes hundreds of unauthorized purchases. Within hours, you start receiving prevention alerts. The influx in unusual activity makes you go looking for the cause. And you figure out that fraudsters have been wreaking havoc on your business. So you ramp up your fraud detection efforts, and the number of unauthorized transactions immediately drops back to normal. Because the notices came in so quickly, you are able to stop order fulfillment and retain your merchandise. So you save money and keep your chargeback ratio in check.

That all seems like a pretty sweet deal, right?

Insights and intelligence

If you work with the right service provider — like AltoPay — your prevention alert solution will include detailed reporting and analytics. This information can provide a ton of valuable insights:

• Which vendor is preventing more chargebacks — Ethoca or Verifi?
• Are there any issues with matching alerts to their original orders?
• Have you enrolled all your billing descriptors?
• What are the most common reasons for disputes?
• Where are disputes coming from? Which countries and regions have the highest risk?
• Is there a certain price point that is disputed more often than others?
• Which product or service is generating the most disputes?
• Is there an issuing bank or BIN that has a higher-than-normal dispute rate?
• What steps do you need to take to prevent future disputes?
• Are you experiencing overlap?
• Are you entitled to credits?

With the right reporting, you’ll know exactly what you are paying for, how well the solution is working, and how much ROI you can expect.

Proactive support

Lower chargeback rates and real-time notifications are benefits you can expect from any service provider. And reporting is fairly common — although the quality, quantity, accuracy, detail, and intuitiveness can vary significantly.

But honest, helpful, proactive support is pretty hard to come by.

Here are some things a support team should be able to help you figure out:

• Is your strategy working the way you want it to?
• Should you turn a vendor off?
• Should you add more solutions?
• Should you blacklist a particular issuing bank or BIN?
• What are the underlying reasons for disputes?
• Do you need to make any adjustments to your business’s processes or policies?
• Should credits be issued? Have you received all the credits that are due?

In addition to advising you on how to build an ROI-optimized strategy, a solution provider ought to also help you manage your strategy. For example, rather than make you submit credit requests yourself, the solution provider can do it for you.

The reason these services are hard to find is because they can be detrimental to a solution provider’s revenue stream.

Here’s an example. Let’s say a particular BIN is issuing unnecessary alerts. Will the support team suggest you block that BIN? Doing so would save you a lot of money but would also cut down on the solution provider’s revenue.

Again, you can get prevention alerts anywhere. But if you want a chargeback management strategy that is optimized for ROI, reach out to AltoPay.

A money-back guarantee

Prevention alerts are an effective chargeback management tool. But like anything else, they aren’t perfect. Sometimes, protection doesn’t work as it should.

You might refund an alert and respond within the time limit but still receive a chargeback. Obviously, that’s not fair. If you pay for a service, you ought to get what you pay for!

Fortunately, in these situations, you are entitled to a credit from the alert vendor. But again — access to this feature depends on the solution provider you work with.

AltoPay provides detailed reporting for credits and ensures you are only paying for valid alerts.